FINAL PROJECT

ON

Foods
Financial Statement Analysis
Subject
Financial Accounting
1sh Semester
Submitted to:
Sir Hafiz Javed
Submitted by:
Sahar Bano

MIT-F15-19

MASTERS IN INFORMATION TECHNOLOGY

Faculty of Management Sciences

THE SUPERIOR UNIVERSITY LAHORE

Campus, Okara, Pakistan
Date of Submission 29-03-2016
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Executive Summary of Nestle

This report, regarding Nestl water. It starts with an introduction about
Nestl followed by the history of Nestl. It gives a briefing about Nestl.
The report shows an internal architecture of the working of the Nestl
confectionary business. It gives a detail about the supporting department that has
helped the business in their daily working. This report also includes the Ratios
Analysis of Nestle foods. All the Ratio are applied on the annual reports of Nestle
foods, the data has been discussed and explained in tables and graphical form in
year vise. Vertical, horizontal and Common size analysis are also discussed.
Also it discusses the objectives, policies of the organization along with their
competitors at national level. There are also some suggestions/recommendations
for the business.

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Content

Introduction.................................................................................................................................4
Our vision Statement...................................................................................................................4
Our Mission and values...............................................................................................................4
Objective of Nestle foods............................................................................................................4
History of Nestle..........................................................................................................................4
Nestle Pakistan Ltd......................................................................................................................4
Organization Structure of Nestle.................................................................................................4
Ratios Analysis of Nestle foods...................................................................................................4
Horizontal analysis......................................................................................................................4
Vertical analysis...........................................................................................................................4
History (The story of Nestl)...................................................................................................6
Nestl Pakistan Limited...........................................................................................................8

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Introduction
Food is core element in our daily lives. Not only does it enable us to survive, but appropriate
amounts and quality also help to ensure a better standard of living by contributing to our health
and wellness. Consumer needs and expectations associated with a particular food product are not
fixed, but change with time and according to geographic region, culture and the various stages of
life. Ever since its foundation in 1866, Nestls goal has been to keep in step with this constant
process of change. It reacts to new consumer requirements with innovative and continually
renovated products, and implements new scientific findings in tasty foods.

Our Mission Statement

Nestls mission, in the words of our founder Henri Nestl, is to: ...positively influence the
social environment in which we operate as responsible corporate citizens, with due regard for
those environmental standards and societal aspirations which improve quality of life.

Our vision and values

To be a leading, competitive, Nutrition, Health and
Wellness Company delivering improved shareholder
value by being a preferred corporate citizen preferred
employer, preferred supplier selling preferred
products.

Nestl Pakistan subscribes fully to this vision of

being the number one Nutrition, Health, and Wellness
Company
in
Pakistan.
In
particular,

we

envision

to;

Lead a dynamic, passionate and professional workforce proud of our heritage and
positive about the future.

Meet the nutrition needs of consumers of all ages from infancy to old age, from
nutrition to pleasure, through an innovative portfolio of branded food and beverage
products of the highest quality.

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Deliver shareholder value through profitable long-term growth, while continuing to play

a significant and responsible role in the social, economic, and environmental sectors of
Pakistan.

Motto of Nestl is Good Food, Good Life.

Objectives:

Nestl does not favor short-term profit at the expense of successful long-term business
development.

Nestl recognizes that its consumers have a sincere and legitimate interest in the
behavior, beliefs and actions of the Company behind brands in which they place their
trust, and that without its consumers the Company would not exist.

Nestl believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the form of
voluntary business principles is beneficial in order to ensure that the highest standards are
met throughout the organization.

Nestl is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and employees.
Therefore, recruitment of the right people and ongoing training and development are
crucial.
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Nestl continues to maintain its commitment to follow and respect all applicable local
laws
in each of its markets.

History (The story of Nestl)

1866 -1905
In the 1860s Henri Nestl, a pharmacist, developed a food for
babies who were unable to breastfeed. His first success was a
premature infant who could not tolerate his mother's milk or
any of the usual substitutes. High infant mortality rates, and the
lack of suitable replacement foods for babies with no access to
breast milk, were the motivation behind Henri Nestls
invention of Farine Lactee. He was also able to offer his food
to convalescent and elderly people, thus laying the foundations
of todays concept of nutrition. He said,
The thought that my invention could save the lives of so many
Children counted enormously, the financial gain was not the
Prime motivation .
(Henri Nestl. 1869)
People quickly recognized the value of the new product, after
Nestl's new formula saved the child's life, and soon, Farine
Lacte Henri Nestl was being sold in much of Europe.

1905-1918
In 1905 Nestl merged with the Anglo-Swiss Condensed Milk
Company. By the early 1900s, the company was operating
factories in the United States, Britain, Germany and Spain. World War I created new demand for
dairy products in the form of government contracts. By the end of the war, Nestl's production
had more than doubled.

1918 -1938

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After the war Government contracts dried up and consumers switched back to fresh milk.
However, Nestl's management responded quickly, streamlining operations and reducing debt.
The 1920s saw Nestl's first expansion into new products, with chocolate the Company's second
most important activity

1938 -1944
Nestl felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to
$6 million in 1939. Factories were established in developing countries, particularly Latin
America. Ironically, the war helped with the introduction of the Company's newest product,
Nescaf, which was a staple drink of the US military. Nestl's production and sales rose in the
wartime economy.

1944 -1975
The end of World War II was the beginning of a dynamic phase for Nestl. Growth accelerated
and companies were acquired. In 1947 came the merger with Maggi seasonings and soups.
Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's
(1973). Diversification came with a shareholding in LOral in 1974.

1975 -1981
Nestl's growth in the developing world partially offset a slowdown in the Company's traditional
markets. Nestl made its second venture outside the food industry by acquiring Alcon
Laboratories Inc.

1981 -1996
Nestl divested a number of businesses1980 / 1984. In 1984, Nestl's improved bottom line
allowed the Company to launch a new round of acquisitions, the most important being American
food giant carnation.

1996+
The first half of the 1990s proved to be favorable for Nestl: trade barriers crumbled and world
markets developed into more or less integrated trading areas. Since 1996 there have been
acquisitions including San Pellegrino (1997), Spillers Pet foods (1998) and Ralston Purina
(2002). There were two major acquisitions in North America, both in 2002: in July, Nestl
merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was
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announced

of

Chef

America,

Inc.

Nestl Pakistan Limited

Nestl Pakistan Ltd. is a food processing
company, which is registered on Karachi
and Lahore stock exchanges. It established
its first production unit in 1988 in
Sheikhupura, Pakistan with the name of
Nestl Milkpak Limited but its name has
been changed and now it is called Nestl
Pakistan Limited.
Headquartered in Lahore, the Company
operates five production facilities. Two of
its factories in Sheikhupura and Kabirwala
are multi product factories, while another one at Karachi is already for production. One factory
in Islamabad and two in Karachi produce bottled water.

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Through its effective marketing and a vast sales and distribution network throughout the country,
it ensures that its products are made available to consumers whenever, wherever and however.
Nestle Pakistan is a subsidiary of Nestle S.A.- a company of Swiss origin headquartered in
Vevey, Switzerland.

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Organizational structure of Nestl is hierarchical

There is a chain of command that extends from upper organization levels to the lowest levels and
clarifies who reports to whom. The orders move from upward to downward and suggestions
move downward to upward direction. The continuous improvement section is made for this
purpose. It encourages employees to give their suggestions and share the new ideas. The jobs are
formalized; there are explicit job descriptions, numerous organizational rules, and clearly defined
procedures covering work procedures. But in spite of formal rules and regulations, Nestl keeps
on changing to keep a pace with the changing environment. So, it is strict but not rigid
organization. In effort to be more flexible and responsive, there has been distinct trend in this
organization toward decentralizing decision-making.

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